Aviation liability coverage redefined

On Aug. 28, 2003, Toby Pearson learned that his wife, Kathryn, was killed in a plane crash in northern Minnesota. Miraculously, their two daughters, Grace and Lily, survived the crash. Both suffered extensive injuries and required extended hospital stays.

Shortly after Pearson took his daughters home, the medical bills began to appear. It was then that he learned that the aviation insurance company for the pilot was denying coverage, claiming that the pilot was not factual on his application.

It took another three years of litigation before a settlement was reached.

This chain of events led to the creation of a new law, signed April 10 by Gov. Tim Pawlenty addressing aviation liability insurance. It takes effect Jan. 1, 2009.

Rep. Michael Paymar (DFL-St. Paul), who sponsors the law with Sen. Yvonne Prettner Solon (DFL-Duluth), said that “it narrows, but does not eliminate, the likelihood of another third party victim having to suffer through the chaos and struggles that the Pearsons had to experience.”

The new legislation states that for an aviation insurance company to deny a claim, the pilot’s actions, or failure to act, must have a direct effect on the loss.

At the end of last year’s session, a working group was established to review the aviation insurance industry and third-party issues. The law is a result of the group’s deliberations.

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